Some days it is just plain hard not to laugh at the ridiculous manipulation of numbers the Commerce Department spews forth.  So you can imagine my astonishment this morning when GDP numbers were revised downward from the 2.8% growth rate reported last month, which had been revised downward from the original report of 3.5%.  We have finally settled on a mundane 2.2% annual GDP, since this is the final revision.  On a positive note, the current revision is still the highest GDP since the third quarter of 2007.

The talking point on government economic reports is always consistent, as we typically trumpet exceptional numbers on initial economic reports then quietly revise downward in following months.  The Commerce Department would say the numbers are revised as more information is gathered and a clearer picture of the economy emerges, and this is indeed a cogent argument.  The job of estimated the US GDP is a mammoth undertaking.   But that is not the problem, it has been a long time since I have seen numbers revised upward as oppose to downward.  Simple probability would suggest that they would make revisions both to the upside and downside as more information becomes available.

I suppose it isn’t politically correct to question the Commerce Departments veracity, but initial numbers released by the Department have to be treated with a grain of salt, as few people put much confidence in the bright picture often portrayed by the numbers.   This practice is nothing new and did not start under the Obama Administration, it’s been going on for years, and has reduced the Commerce Departments credibility significantly.  The market has simply learned to shrug off the glowing reports issued and continue trading with what the market offers to be true through independent pricing models and reports issued by individual corporations.

What ever happened to the maxim to “err on the conservative side?”  Even MSNBC, the bastion of spinning horrible news into “not quite as bad as you think” news has taken to shrugging off statistical surprises and recommends, from time to time, to wait for the revisions to give us a clearer picture.   Oddly enough, it is my opinion that the general public has a pretty good idea what is going on in the economy.

I was at Wal-Mart yesterday and happen to know the manager pretty well, and questioned him how Christmas season sales were going and he smiled and rattled off a stream of positive numbers over last year.  I didn’t need to ask, really, the throngs of people in Wal-Mart indicate a change in spending.   On the other hand, I questioned the local Macy’s manager about Christmas sales and he stared at his shoes and mumbled incoherent jabber about a late surge he expected to bring the numbers up to par from last year.  The logic is simple:   Wal-Mart is cheaper than Macy’s and people are spending less this year.  I do’t need the Commerce Department to tell me that fact, either.  I can see and feel it.

As always, I am thankful I am scalper and don’t have to depend upon government prognostication to support myself.